U.S. Inflation Rises the Smallest Annual Increase Since February 2021, Job Openings Drop, and Mortgage Applications Climb Amid Rate Declines: Portafolio Capital Markets Recap for Week Ending 9/13/2024
U.S. Consumer Price Index Shows 0.2% Growth in August, Driven by Rising Shelter Costs
The U.S. Consumer Price Index (CPI-U) increased by 0.2% in August 2024, matching the previous month's rise. Over the past 12 months, the CPI rose 2.5%, the smallest annual increase since February 2021. The primary driver of August’s increase was a 0.5% rise in the shelter index. Food prices saw a modest 0.1% increase, while energy costs fell 0.8%. Excluding food and energy, core inflation rose by 0.3%, with notable price hikes in airline fares, motor vehicle insurance, and apparel. Over the year, the energy index dropped 4%, while food prices climbed 2.1%.
The press release by the Bureau of Labor Statistics (BLS) can be found here.
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U.S. Job Openings Drop to Lowest Level Since 2021 as Labor Market Slackens
In July, U.S. job openings dropped to their lowest level in 3½ years, signaling a cooling labor market, according to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS). The number of available positions fell to 7.67 million, a decline of 237,000 from June, and below economists' expectations of 8.1 million. The ratio of job openings per available worker dropped to less than 1.1, down from its peak of over 2 to 1 in early 2022. Layoffs increased by 202,000 to 1.76 million, while separations jumped by 336,000. Despite the slump in openings, hires rose by 273,000, indicating continued demand for workers. Analysts suggest the data could lead the Federal Reserve to lower interest rates during its September meeting.
The PPI press release by the Bureau of Labor Statistics (BLS) can be found here.
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Mortgage Applications Rise 1.4% Amid Continued Rate Declines
Mortgage applications increased 1.4% for the week ending September 6, 2024, according to the Mortgage Bankers Association (MBA), despite a 10% drop in unadjusted volume due to the Labor Day holiday. Refinancing applications rose by 1%, up 106% from last year, as mortgage rates dropped for the sixth consecutive week. The average rate for 30-year fixed mortgages with conforming loan balances fell to 6.29%, the lowest since February 2023. MBA’s Deputy Chief Economist Joel Kan cited cooling inflation and a slowing job market as contributing factors to falling rates. Despite these improvements, affordability challenges and low inventory continue to hinder home purchase activity, with purchase applications down 3% from the same week last year.
The full press release by the Mortgage Bankers Association (MBA) can be found here.
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U.S. Unemployment Claims Increase Slightly for the Week Ending September 7
Initial claims for unemployment benefits in the U.S. rose by 2,000 to 230,000 during the week ending September 7, according to the Department of Labor. This marks a slight increase from the previous week's revised figure of 228,000. The four-week moving average, a measure used to smooth out short-term volatility, increased by 500 to 230,750. Meanwhile, the insured unemployment rate remained steady at 1.2%, with 1.85 million people continuing to receive benefits. Unadjusted data showed a decline in initial claims, totaling 177,663, a 6.8% drop from the previous week. States like Massachusetts and Wisconsin saw the largest increases in claims, while Texas and New York saw the biggest decreases.
The full press release by the Department of Labor can be found here.
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